Polymeric MDI Market Forecast in 2018

Coco

2018-02-12

Introduction: In the first three quarters in 2017, the Chinese MDI market performed actively. However, the polymeric MDI prices slumped in Q4, 2018. In 2018, though the supply will see some changes, the oligopoly will still exist in the market. It is hard for polymeric MDI market prices to move high and the prices won’t be too low.

In the first three quarters in 2017, the Chinese polymeric MDI market performed actively. However, the polymeric MDI prices slumped in Q4, 2018. With the coming Spring Festival, most players had retreated from the market. Today, Echemi will forecast the overall polymeric MDI market trend in 2018.

First, the supply of MDI in 2018 will increase slightly from 2017.

In 2018, the 240kt/a unit at Shanghai Lianheng Isocyanate (144kt/a capacity of polymeric MDI) is expected to be put into operation in March. Moreover, the 400kt/a unit at Sadara runs normally, and around 40%-50% goods will flow into China. The overall supply structure of polymeric MDI will change in 2018. In 2018, major suppliers are: Wanhua Chemical, BASF, Covestro, Huntsman and Sadara. The competition will be fierce.

Second, the downstream demand will remain modest.

In 2018, the downstream industries will remain weak. The refrigerator industry saw high prices of raw materials in 2017. The overall operating rate in 2018 will be fine and increase according to the expected. Supported by related policies, the external wall insulation industry will increase stably.

Third, production cost has limited influence on the MDI market.

According to Echemi’s Regression Analysis Model, the R value of polymeric MDI and benzene, polymeric MDI and aniline is 0.03 and 0.13 respectively. The P value is less than 0.05. Benzene and aniline prices have limited influence on the polymeric MDI market.

Finally, off-season and peak seasons influence the market.

Q1 is the traditional off-season and market prices will decline. In Q2, influenced by the busy farm season, it is difficult for the polymeric MDI market to move up. Q3 is the traditional peak season. Refrigerator, heat preservation industries will be good, which will promote the polymeric MDI market. In Q4, the market will enter the downtrend again.

According to Echemi, the polymeric MDI market in 2018 cannot copy the high levels in 2017 and the overall prices won’t be too low. The market prices will be in the range of RMB 20,0000-28,500/mt in cash. Lowest prices may appear in May and the highest price may appear in September.